The Sept 12 issue of BUSINESSWORLD (www.businessworldindia.com) has a capsule summary of the new SEZ Act 2005 which is supposed to have gone into effect this month. Calling it "one of the most radical pieces of economic legislation", it fears that the new Act "could end up merely providing a lucrative tax shelter" for India Inc with no worthwhile stimulus to exports.
Effectively, it says, the new Act has extended the window of Income Tax exemptions which was due to end on March 2009. What is worse, apparently companies hardly have to do anything worthwhile to avail of this lucrative benefit. There is no prospect for improvement of infrastructure or governance (at the state level) under the SEZ Act. There are no concessions in labour laws either. The mere availablity of tax savings is supposed to compensate for these drawbacks! The article wonders how this "reform" got passed the Left parties.
